Execs seek ways to lower costs amid global crisis

Businessmen sent a strong signal yesterday to the government on what important concerns should be addressed most to help companies reduce their operating expenses.

Management Association of the Philippines Trade, Industry and Information and Communications Technology (ICT) committee chairman Elizabeth Lee told reporters yesterday that based on the initial findings of a survey that was conducted to measure the success of its members in reducing the cost of their businesses, possible areas to cut cost include travel, inventory handling, fuel costs, facilities, storage rental, and marketing and advertising.

Lee explained the survey which was conducted two months back was aimed at reiterating to government that these were the same problems of companies before but were even magnified now under the current global economic crisis.

“Emerging economies like the Philippines, have been perceived to be better prepared to cope with the global financial crisis. However, it would be a great opportunity for companies to find ways on how to lower their costs in doing business to survive the crisis and be more competitive,” she said.

Lee said the survey covered a cross section of industries of the Philippine business in manufacturing and services.

Respondents were from multinational companies, large, medium and small enterprises.

Majority of the respondents named the top three cost-saving measures as the improvement of productivity such as the use of automation and ICT (61 percent); business process re-engineering such as redesigning organization processes (33 percent), and outsourcing or out-tasking (21 percent).

Lee added that it was surprising that retrenchment and offshore expansion or moving operations from the Philippines were the last viable options being considered by the companies. Only five percent of the respondents said they intend to lay off workers.

“Retrenchment will be the last resort because they believed it will not do anybody any good,” Lee stressed.

Many respondents (39 percent) considered electricity as the common cost they want to reduce significantly but the number one ranked item was taxes.

Lee argued that they have considered to release the preliminary result of the survey because of the significant results of the partial turnout that could be used as basis to realign the program of the committee in order to benefit the Philippine business community. –Ayen Infante, Daily Tribune